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Shares of Relypsa Inc (NASDAQ:RLYP) skyrocketed by more than 12% today after US Food and Drug Administration rejected the potassium-lowering drug ZS-9 of its rival company AstraZeneca plc (ADR) (NYSE:AZN). The rejection of AstraZeneca’s drug bodes well for Relypsa because the company got an FDA approval for its own potassium-lowering drug, Veltassa, in October. The ouster of AstraZeneca from the growing market leaves Relypsa with heavy prospects for sales. AstraZeneca acquired ZS-9 drug for $2.7 billion from ZS Pharma last year. FDA cited a manufacturing problem as the reason for the decision.

The development might attract more attention to Relypsa, causing hedge funds to jump into the stock. Overall, Relypsa Inc (NASDAQ:RLYP) was in 14 hedge funds’ portfolios at the end of March. RLYP shareholders have witnessed a decrease in hedge fund interest of late. There were 21 hedge funds in our database with RLYP holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Pacific Premier Bancorp, Inc. (NASDAQ:PPBI), Universal American Corporation (NYSE:UAM), and Fox Factory Holding Corp (NASDAQ:FOXF) to gather more data points.

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Trade (NASDAQ:RLYP) Now!

In the financial world, there are numerous tools market participants put to use to value publicly traded companies. A duo of the best tools are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the top fund managers can outpace the broader indices by a very impressive amount (see the details here).

When looking at the institutional investors followed by Insider Monkey, OrbiMed Advisors, managed by Samuel Isaly, holds the number one position in Relypsa Inc (NASDAQ:RLYP). OrbiMed Advisors has a $100.3 million position in the stock, comprising 1.1% of its 13F portfolio. The second largest stake is held by JHL Capital Group, managed by James H. Litinsky, which holds a $40.7 million position; the fund has 3.9% of its 13F portfolio invested in the stock. Other members of the smart money that hold long positions consist of James E. Flynn’s Deerfield Management, Paul Marshall and Ian Wace’s Marshall Wace LLP and Matt Sirovich and Jeremy Mindich’s Scopia Capital.

Seeing as Relypsa Inc (NASDAQ:RLYP) has experienced a bearish sentiment from the smart money, logic holds that there is a sect of funds that decided to sell off their positions entirely by the end of the first quarter. On the next page, we are going to take a closer look at some of these funds.